A business law blog published by the business lawyers at AttorneyBritt - Gary L. Britt, CPA, J.D. Commentary and information regarding the laws and regulations applicable to individuals, corporations, partnerships, and limited liability companies (LLCs); as they relate to the myriad of business transactions, contracts, and agreements every business owner, shareholder, member, physician, and/or health care provider must consider.

Friday, August 11, 2017

IRS Tax Tips For Starting A New Business

New business owners may also find the following five IRS tax tips helpful:

1. Business Structure. An early choice to make is to decide on the type of structure for the business.
The most common types are sole proprietor, partnership and corporation.
The type of business chosen will determine which tax forms to file.

2. Business Taxes. There are four general types of business taxes.
They are income tax, self-employment tax, employment tax and excise
tax. In most cases, the types of tax a business pays depends on the type
of business structure set up. Taxpayers may need to make estimated tax payments. If so, use IRS Direct Pay to make them. It’s the fast, easy and secure way to pay from a checking or savings account.

3. Employer Identification Number (EIN). Generally, businesses may need to get an EIN for federal tax purposes. Search “EIN” on IRS.gov to find out if the number is necessary. If needed, it’s easy to apply for it online.

4. Accounting Method. An accounting method
is a set of rules used to determine when to report income and expenses.
Taxpayers must use a consistent method. The two most common are the
cash and accrual methods:

a. Under the cash method, taxpayers normally report income and deduct expenses in the year that they receive or pay them.

b. Under the accrual method, taxpayers
generally report income and deduct expenses in the year that they earn
or incur them. This is true even if they get the income or pay the
expense in a later year.